What is PMAY?

The Pradhan Mantri Awas Yojana (PMAY) is a government scheme to help promote “Housing for all by 2022”. It aims to assist first time home buyers and encourage women to become home owners by providing an interest subsidy on home loans. PMAY brings into fold a Credit Linked Subsidy Scheme (CLSS) for home loans in the urban property market.

Who is eligible under PMAY?

The scheme is aimed to provide primary housing for all. The basic eligibility rules, in order to avail PMAY benefits are as follows.

  • The applicant’s family* income should not be above Rs.18 lakh per annum.
  • The maximum RERA carpet area eligible for the subsidy is 200 sqm.
  • The applicant’s family must not own a house in any part of the country.
  • In the case of a married couple, either a single or a joint ownership deal is allowed, and both options will receive just one subsidy.
  • The applicant’s family must not have availed the benefit of any housing-related schemes set up by the Government of India.

How does PMAY work?

There are 4 broad categories of the CLSS scheme under PMAY. The categories, and the loan eligibility & subsidy across these categories have been explained in the table below**.

Category Household Income Maximum House Area Govt Subsidy NPV of subsidy
Economically Weaker Section (EWS) < 3 lacs 30 sqm 6.5% for loan up to 6 lacs 2.67 lacs
Lower Income Group (LIG) 3-6 lacs 60 sqm 6.5% for loan up to 6 lacs 2.67 lacs
Medium Income Group 1 (MIG1) 6-12 lacs 160 sqm 4% for loan up to 9 lacs 2.35 lacs
Medium Income Group 2 (MIG2) 12-18 lacs 200 sqm 3% for loan upto 12 lacs 2.3 lacs

Rest is simple. Whoever is availing the PMAY subsidy under a particular category, gets the subsidy amount directly deducted from the overall loan amount. This reduces the overall EMI burden. The savings in terms of EMI has been highlighted in the table below.

Original Loan amount (A) Original EMI NPV of subsidy (B) Revised Loan amount (A-B) Revised EMI EMI savings
6 5398 2.67 lacs 3.33 2996 2402
6 5398 2.67 lacs 3.33 2996 2402
9 8098 2.35 lacs 6.65 5983 2115
12 10797 2.3 lacs 9.7 8727 2070

How to avail the PMAY subsidy?

PMAY linked loans can be availed from any primary lending institutions (PLI) such as scheduled commercial banks, housing finance companies, cooperative banks, etc. Housing Development Corporation (HUDCO) and National Housing Bank (NHB) have been identified as the Central Nodal Agencies (CNAs) to channelize this subsidy to the lending institutions. The process has been highlighted in the flowchart below:

  • Home Loan application by individual to the PLI
  • Determination of loan amount and sanction of loan subsidy based on eligibility
  • Claim submission by PLI to CNA
  • Claim approval and release of subsidy amount by CNA to PLI
  • Credit linked subsidy deposited by PLI in the beneficiary’s loan account

Our projects are approved for funding by various leading banks. Our bankers are available on site to assist you with the PMAY subsidy and your home loan.

Looking for a property,
but not sure where to start?

Let us help. Speak to our property expert today.

© 2019 Poddar Housing  |  All Rights Reserved